If a calendar year Money Purchase with a last day requirement is merged into a Profit Sharing plan 9/30/99, is there a required Money Purchase contribution or does the last day requirement allow for no money purchase contribution??

The IRS has addressed this issue with respect to the amendment of a profit sharing plan prior to the date a participant becomes entitled to an allocation. In the "Gray Book" (Q #44) from the 1996 Enrolled Actuaries Meeting, the IRS said that the deadline for changing an allocation formula under a profit sharing plan was prior to the date when rights to an allocation accrue. According to the IRS, "the date rights to an allocation accrue is based on all the terms of the Plan, including ... the minimum hours of service required to receive an allocation or a "last day" requirement."

At first blush, it seems that the MPP could be merged into the PSP prior to 12/31 without a contribution having to be made. But I think an argument can be made that you just accelerated the last day of the MPP's plan year to the date of the merger, in which case a contribution would be required for anyone who met the hours requirement. One way around this would be to amend the contribution formula under the MPP to 0% prior to the merger, assuming the 204(h) notice was timely given.